Shell Oil Defends Nigeria Operations To Dutch Lawmakers

AMSTERDAM — Royal Dutch Shell executives defended their much-criticized operation in the Niger Delta before Dutch lawmakers on Wednesday but said the company will not pay compensation for pollution caused by sabotage and vowed to fight a $100 million fine imposed by a Nigerian court for a 40-year-old oil spill.

In a parliamentary hearing in The Hague, Amnesty International and environmental groups accused Shell of abusing human rights, failing to clean up disastrous environmental damage and continuing the hazardous practice of flaring gas from about 100 wells.

Hours earlier, Friends of the Earth activists scaled the company's headquarters in The Hague and hung a banner reading, "Shell, let's go clean up Nigeria." Some activists dressed as oil-smeared birds and held photographs of despoiled farmland swimming in oil.

Environmental abuse and Shell's failure to clean up the mess led to "widespread human rights violations," including the right to food, clean water, livelihood and good health, said Audrey Gaughran, Amnesty's director of global issues. Shell's failure to adequately compensate victims "led directly to community conflict and distrust," she told a panel of Dutch legislators.

Shell remains the largest foreign oil operator in Nigeria's ecologically sensitive Delta region, despite attacks by local rebels seeking a share of profits. Shell says it now pollutes less and blames spills on thieves breaking into pipelines.

"When it comes to issues of the safety of people and crime ... it's the responsibility of the government. That's not happening. But you can't lay it on our doorstep," said Peter de Wit, director of Shell Netherlands.

Ian Craig, Shell's director for sub-Saharan Africa, blamed sabotage for 70 percent of the oil spills over the past five years. He said Shell compensates residents for pollution caused by faulty production, but paying for damage from exploded pipelines would provide a "perverse incentive" for more attacks.

Geert Ritsema of Friends of the Earth said environmentalists believed Shell was exaggerating the extent of the sabotage to avoid liability for the cleanup. Shell said Nigerian government agencies determine responsibility for pollution, but Gaughran told the panel that "the investigation system is deeply flawed. It is dominated by the oil companies."

The two nonprofit agencies filed a complaint this week with the Organization for Economic Cooperation and Development against Shell, alleging it issued "discredited and misleading information" blaming militants for most of the oil pollution, which they charged breached OECD guidelines for multinational companies.

The executives also said Shell would pursue its appeal of a decision handed down last July by a Nigerian federal court, after 10 years of litigation, that ordered it to pay $100 million to the Ejama-Ebubu community for an oil spill in 1970.

One question raised by the lawmakers was whether the Dutch parliament could enact legislation to force the country's multinationals to accept greater social responsibility and whether Dutch courts should be involved.

Friends of the Earth and four Niger Delta residents filed a civil suit in The Hague last year against the international oil company for alleged negligence in cleaning oil spills. More than 500 pollution cases have been filed in Nigerian courts against Shell Nigeria, but few have made their way through the judicial labyrinth to receive compensation.

Liesbeth Enneking, a specialist in corporate law at the University of Utrecht, told the panel the case in The Hague was "highly relevant," opening a window on multinationals' foreign operations and providing recourse for victims.

De Wit argued that legal action in the Netherlands "is not the best way for achieving change." He said it was up to the Nigerian courts to ensure that the country's laws are enforced, and the Dutch parliament would do best by encouragement greater empowerment of the Nigerian legal system.